Wall Street stocks surged on Wednesday, with the S&P 500 and Dow Jones Industrial Average reaching record closing highs. This rally came after the release of the Federal Reserve’s September meeting minutes and ahead of critical September inflation data and the earnings season.
Shares of Alphabet, however, slipped 1.5% after the U.S. Department of Justice indicated it might seek a court order requiring Google to divest parts of its business, including its Chrome web browser and Android operating system, to curb its search monopoly.
The Federal Reserve’s minutes revealed that a “substantial majority” of officials supported a significant half-point rate cut. Despite this, there was no commitment to any specific pace of future cuts, with traders currently pricing in a 79% chance of a 25-basis-point rate cut and a 21% chance that rates will remain unchanged, according to CME’s FedWatch.
Lindsey Bell, chief strategist at 248 Ventures, said, “The minutes confirmed what we thought, relieving investors. There was a debate over the 50-basis-point cut, meaning it wasn’t a sweeping consensus.”
Investors are now eagerly awaiting Thursday’s Consumer Price Index report and the start of the third-quarter earnings season, particularly from major U.S. banks on Friday.
“The minutes also confirmed that the Fed believes it’s won the fight on inflation, so tomorrow’s CPI data shouldn’t be too surprising,” Bell added.
The Dow rose 431.63 points (1.03%) to close at 42,512.00, while the S&P 500 gained 40.91 points (0.71%) to 5,792.04, and the Nasdaq climbed 108.70 points (0.60%) to 18,291.62.
The S&P 500 achieved a record closing high for the first time in October, marking its 44th record close in 2024. The Dow last hit a record close on Oct. 4. Nine of the 11 S&P 500 sectors advanced, with utilities and communications services falling due to rate sensitivity and concerns over Alphabet’s legal troubles.
Daniel Morris, BNP Paribas’ chief market strategist, noted, “Antitrust news creates concerns for the broader tech sector, especially dominant players.”
Elsewhere, Boeing shares dropped 3.4% after labor negotiations with its key manufacturing union broke down. On the positive side, Norwegian Cruise Line surged 10.9% after Citi upgraded its rating to “buy.” Carnival rose 7%, and Royal Caribbean added 5.2%.
In the energy sector, Arcadium Lithium shares soared 30.9% after Rio Tinto announced plans to acquire the company for $6.7 billion. Meanwhile, U.S.-listed shares of Chinese companies Alibaba and PDD Holdings fell as investors awaited potential new stimulus from China.
On U.S. exchanges, 11.09 billion shares were traded, slightly below the 12.04 billion average of the last 20 sessions.